Basic Management Principles & Theories CHAP 1 1-3 Management Key Concepts Organizations: People working together and coordinating their actions to achieve specific goals. Goal: A desired future condition that the organization seeks to achieve. Management: The process of using organizational resources to achieve the organization’s goals by... Planning, Organizing, Leading, and Controlling MANAGEMENT THEORIES Four basic management approaches • • • • Classical Behavioral Management science Integrative system 1-4 Additional Key Concepts Resources are organizational assets and include: People, Machinery, Raw materials, Information, skills, Financial capital. Managers are the people responsible for supervising the use of an organization’s resources to meet its goals. 1-5 Achieving High Performance Organizations must provide a good or service desired by its customers. David Johnson of Campbell Soup manages his firm to provide quality food products. Physicians, nurses and health care administrators seek to provide healing from sickness. McDonald’s restaurants provide burgers, fries, etc that people want to buy. 1-6 Organizational Performance Measures how efficiently and effectively managers use resources to satisfy customers and achieve goals. Efficiency: A measure of how well resources are used to achieve a goal. Usually, managers must try to minimize the input of resources to attain the same goal. Effectiveness: A measure of the appropriateness of the goals chosen (are these the right goals?), and the degree to which they are achieved. Organizations are more effective when managers choose the correct goals and then achieve them. 1-7 Managerial Functions Henri Fayol was the first to describe the four managerial functions when he was the CEO of a large mining company in the later 1800’s. Fayol noted managers at all levels, operating in a for profit or not for profit organization, must perform each of the functions of: Planning, organizing, leading, controlling. 1-8 Four Functions of Management Planning Choose Goals Organizing Controlling Working together Monitor & measure Leading Coordinate 1-9 Planning Planning is the process used by managers to identify and select appropriate goals and courses of action for an organization. 3 steps to good planning : 1. Which goals should be pursue? 2. How should the goal be attained? 3. How should resources be allocated? The planning function determines how effective and efficient the organization is and determines the strategy of the organization. 1-10 Organizing In organizing, managers create the structure of working relationships between organizational members that best allows them to work together and achieve goals. Managers will group people into departments according to the tasks performed. Managers will also lay out lines of authority and responsibility for members. An organizational structure is the outcome of organizing. This structure coordinates and motivates employees so that they work together to achieve goals. 1-11 Leading In leading, managers determine direction, state a clear vision for employees to follow, and help employees understand the role they play in attaining goals. Leadership involves a manager using power, influence, vision, persuasion, and communication skills. The outcome of the leading function is a high level of motivation and commitment from employees to the organization. 1-12 Controlling In controlling, managers evaluate how well the organization is achieving its goals and takes corrective action to improve performance. Managers will monitor individuals, departments, and the organization to determine if desired performance has been reached. Managers will also take action to increase performance as required. The outcome of the controlling function is the accurate measurement of performance and regulation of efficiency and effectiveness. 1-13 Management Levels Organizations often have 3 levels of managers: First-line Managers: responsible for dayto-day operation. They supervise the people performing the activities required to make the good or service. Middle Managers: Supervise first-line managers. They are also responsible to find the best way to use departmental resources to achieve goals. Top Managers: Responsible for the performance of all departments and have cross-departmental responsibility. They establish organizational goals and monitor middle managers. 1-14 Three Levels of Management Top Managers Middle Managers First-line Managers Non-management 1-15 Restructuring Top Management have sought methods to restructure their organizations and save costs. Downsizing: eliminate jobs at all levels of management. Can lead to higher efficiency. Often results in low morale and customer complaints about service. Management Trends Empowerment: expand the tasks and responsibilities of workers. Supervisors might be empowered to make some resource allocation decisions. Self-managed teams: give a group of employees responsibility for supervising their own actions. The team can monitor its members and the quality of the work performed. 1-16 1-17 Managerial Roles Described by Mintzberg. A role is a set of specific tasks a person performs because of the position they hold. Roles are directed inside as well as outside the organization. There are 3 broad role categories: 1. Interpersonal 2. Informational 3. Decisional Interpersonal Roles 1-18 Roles managers assume to coordinate and interact with employees and provide direction to the organization. Figurehead role: symbolizes the organization and what it is trying to achieve. Leader role: train, counsel, mentor and encourage high employee performance. Liaison role: link and coordinate people inside and outside the organization to help achieve goals. 1-19 Informational Roles Associated with the tasks needed to obtain and transmit information for management of the organization. Monitor role: analyzes information from both the internal and external environment. Disseminator role: manager transmits information to influence attitudes and behavior of employees. Spokesperson role: use of information to positively influence the way people in and out of the organization respond to it. 1-20 Decisional Roles Associated with the methods managers use to plan strategy and utilize resources to achieve goals. Entrepreneur role: deciding upon new projects or programs to initiate and invest. Disturbance handler role: assume responsibility for handling an unexpected event or crisis. Resource allocator role: assign resources between functions and divisions, set budgets of lower managers. Negotiator role: seeks to negotiate solutions between other managers, unions, customers, or shareholders. 1-21 Managerial Skills There are three skill sets that managers need to perform effectively. 1.Conceptual skills: the ability to analyze and diagnose a situation and find the cause and effect. 2.Human skills: the ability to understand, alter, lead, and control people’s behavior. 3.Technical skills: the job-specific knowledge required to perform a task. Common examples include marketing, accounting, and manufacturing. All three skills are enhanced through formal training, reading, and practice. 1-23 Management Challenges Increasing number of global organizations. Building competitive advantage through superior efficiency, quality, innovation, and responsiveness. Increasing performance while remaining ethical managers. Managing an increasingly diverse work force. Using new technologies.
